In his presentation, AfDB Vice President Professor Kevin Urama said that African countries are dealing with several shocks, including the effects of the Covid-19 pandemic, disruptions to global supply chains due to the war in Ukraine and a tightening of global financial conditions.
“These shocks reduced the continent's real GDP growth from 4.8 percent in 2021 to 3.8 percent in 2022. However, African economies remain resilient, with average growth projected to stabilize at 4.1 percent in 2023–24," he said.
Urama said the growth outlook is subject to significant downside risks, including subdued global growth weighing on Africa's exports, persistence of tight global financial conditions exacerbating debt servicing costs, significant losses and damages due to frequent extreme weather events. that exacerbate fiscal pressures and the ongoing war in Ukraine, which is increasing global uncertainty.
Other factors include persistent disruptions to global supply chains and heightened geopolitical risks due to upcoming national elections in some countries.
The 2023 African Economic Outlook Report highlights the urgency of accelerating climate action and green transitions to drive the continent's inclusive and sustainable development.
The new AfDB research, based on the most recent Nationally Determined Contributions (NDCs) of African countries, estimates that private sector finance will need to grow annually by 36% through 2030 to close the continent's climate finance gap, valued on average at $213.4 billion a year, critical to meeting the continent's climate finance needs, estimated at up to $2.8 trillion in 2020-2030, or $250 billion annually.
Professor Urama said unlocking private climate finance will require addressing demand-side and supply-side barriers, while developing innovative financial instruments to tap the continent's enormous investment opportunities in climate and green growth.
